**Sales and Inventory Transactions** **Transaction Details:** 1. **Sale of Merchandise**: - **Seller**: Sampson Co. - **Buyer**: Batson Co. - **Sale Amount**: $31,600 on account. - **Terms**: 2/15, net 45, indicating a 2% discount is available if paid within 15 days; otherwise, the net amount is due within 45 days. 2. **Cost of Goods Sold**: - **Amount**: $23,700. 3. **Payment**: - **Status**: Batson Co. paid within the discount period. **Perpetual Inventory System:** Both Sampson Co. and Batson Co. use a perpetual inventory system for tracking inventory. **Journal Entries for Sampson Co.:** - **a. Record the sale of merchandise**: - Account options and amounts should be filled based on the discount and sales amount. - **b. Record the cost of goods sold**: - Include appropriate accounts and amounts for the COGS related transaction. - **c. Record the receipt of payment**: - Reflects the discount and the final amount received. **Journal Entries for Batson Co.:** - **a. and b. Record the purchase and payment**: - Select accounts and amounts considering the discount and total payable. - **c. Reflect payment made within the discount period**: - Adjust accounts for the discount received. **Note:** - The dropdowns and spaces next to each entry are for selecting the appropriate accounts (e.g., Accounts Receivable, Sales Revenue, etc.) and entering the relevant debit or credit amounts based on standard accounting practices. *End of transaction documentation.*

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Sales and Inventory Transactions**

**Transaction Details:**
1. **Sale of Merchandise**:
   - **Seller**: Sampson Co.
   - **Buyer**: Batson Co.
   - **Sale Amount**: $31,600 on account.
   - **Terms**: 2/15, net 45, indicating a 2% discount is available if paid within 15 days; otherwise, the net amount is due within 45 days.

2. **Cost of Goods Sold**:
   - **Amount**: $23,700.

3. **Payment**:
   - **Status**: Batson Co. paid within the discount period.

**Perpetual Inventory System:**

Both Sampson Co. and Batson Co. use a perpetual inventory system for tracking inventory.

**Journal Entries for Sampson Co.:**
- **a. Record the sale of merchandise**:
  - Account options and amounts should be filled based on the discount and sales amount.
- **b. Record the cost of goods sold**:
  - Include appropriate accounts and amounts for the COGS related transaction.
- **c. Record the receipt of payment**:
  - Reflects the discount and the final amount received.

**Journal Entries for Batson Co.:**
- **a. and b. Record the purchase and payment**:
  - Select accounts and amounts considering the discount and total payable.
- **c. Reflect payment made within the discount period**:
  - Adjust accounts for the discount received.

**Note:**
- The dropdowns and spaces next to each entry are for selecting the appropriate accounts (e.g., Accounts Receivable, Sales Revenue, etc.) and entering the relevant debit or credit amounts based on standard accounting practices.

*End of transaction documentation.*
Transcribed Image Text:**Sales and Inventory Transactions** **Transaction Details:** 1. **Sale of Merchandise**: - **Seller**: Sampson Co. - **Buyer**: Batson Co. - **Sale Amount**: $31,600 on account. - **Terms**: 2/15, net 45, indicating a 2% discount is available if paid within 15 days; otherwise, the net amount is due within 45 days. 2. **Cost of Goods Sold**: - **Amount**: $23,700. 3. **Payment**: - **Status**: Batson Co. paid within the discount period. **Perpetual Inventory System:** Both Sampson Co. and Batson Co. use a perpetual inventory system for tracking inventory. **Journal Entries for Sampson Co.:** - **a. Record the sale of merchandise**: - Account options and amounts should be filled based on the discount and sales amount. - **b. Record the cost of goods sold**: - Include appropriate accounts and amounts for the COGS related transaction. - **c. Record the receipt of payment**: - Reflects the discount and the final amount received. **Journal Entries for Batson Co.:** - **a. and b. Record the purchase and payment**: - Select accounts and amounts considering the discount and total payable. - **c. Reflect payment made within the discount period**: - Adjust accounts for the discount received. **Note:** - The dropdowns and spaces next to each entry are for selecting the appropriate accounts (e.g., Accounts Receivable, Sales Revenue, etc.) and entering the relevant debit or credit amounts based on standard accounting practices. *End of transaction documentation.*
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